June 2, 2015

Governor Mark Dayton

116 Veterans Service Bldg
St. Paul, MN 55155

Speaker Kurt Daudt

463 State Office Bldg
St. Paul, MN 55155

Senate Majority Leader Tom Bakk

232 State Capitol
St. Paul, MN 55155

Dear Governor Dayton, Speaker Daudt and Senator Bakk:

As you finalize negotiations prior to the start of a Special Session, on behalf of Minnesotas
nearly 10,000 restaurants and more than 246,000 employees we strongly encourage you to
include the provision from the House Jobs and Energy Omnibus Bill (Article 4, Section 3) that
would create a tipped employee tier to the minimum wage.
The proposal is for an $8.00 wage for employees who earn $12.00 an hour or more each work
week with their wage and tips combined. The wage would be indexed for inflation beginning in
2017. This is a new and progressive approach to the issue which is uniquely Minnesotan and will
help keep full-service restaurants viable and support good-paying tipped jobs across our state.
Some useful facts we would like you to consider:

Our proposal is not a traditional tip credit. It is a better idea that will help preserve good
paying jobs and sets a new wage level of $12.00 per hour, higher than the other minimum
wage tiers in state law.

Forty-three other states allow use of the Federal tip credit, including all of the states in
our region. This proposal is a better idea than the tip credit because it doesnt set a low
cash wage and require employees to earn tips to get up to the regular minimum.
Minnesotas proposal starts with the highest cash wage for tipped employees of any state
in the country that recognizes tips and would apply the new wage only to employees
earning at least $12 an hour each week.

We know from the experience of other states that not recognizing tips can negatively
impact hospitality jobs and we want to keep as many good jobs in Minnesota as
possible. Washington and Oregon each have a minimum wage of about $9.50 without tip
recognition. The number of employees per restaurant has declined dramatically in these
states in recent years while it has remained steady nationally. If Washington and Oregon
had the same number of employees per restaurant today that they did a few years ago,
there would be 50,000 more jobs in those two states.

305 Roselawn Avenue East, St. Paul, MN 55117-2031

(651) 778-2400 www.mnrestaurant.org

It is urgent to fix the problem this year. This is the last time we can implement a
reasonable tipped wage without having to reduce the hourly rate for employees, which we
do not want to do.

The jobs at stake are good paying positions that have provided opportunities for
employees for many years. A survey of our members shows that our average tipped
employee earns over $18.00 an hour statewide and more than $22.00 an hour in the metro
area.

Traditional full-service restaurants are the only segment of the restaurant industry that
have tipped jobs. This portion of the industry is under pressure from tablet computers and
other dining room automation and from fast casual concepts where guests order and pay
for their meals at a counter.

Full service restaurants are important to the economy, culture and brand of our communities and
our state. We need your help to preserve this amazing asset. This measure received bipartisan
support in the House and has the backing of Republicans and DFLers around Minnesota. We
stand ready to provide any additional information that may be helpful.
Sincerely,

Scott Winer
Tony Spumonis Restaurant
President
Minnesota Restaurant Association

Dan McElroy
Executive Vice President
Minnesota Restaurant Association

305 Roselawn Avenue East, St. Paul, MN 55117-2031

(651) 778-2400 www.mnrestaurant.org